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    Passenger traffic data helps airports recruit and retain airlines

    Quality pitches start with business cases which paint a complete picture of the market

    Building business cases is a primary responsibility for air service development personnel at airports around the world. Inspired by different reasons (political pressures, business links, customer requests, etc.), the goal of each case is always the same—use factual data to present the airport in the best light possible to airlines in order to move a new flight to the top of the infamous, and sometimes mythical, new route “list” each airline’s Network Planning team maintains.

    Within each airport, the Air Service Development group creates persuasive arguments for recruiting and retaining airline business.

    While the best business cases will surface unique differentiators, it is a safe bet the majority of business cases presented to airlines contain:

    • Local demographic information presenting why your city is an attractive choice
    • Business links between both sides of the proposed new route—after all, carriers desperately want to fill business class cabins
    • Air traffic trends which support a business case
    • Any incentives being offered for a new service to your location

    It can sometimes be a chore to gather all the needed information from many different sources in order to to create a full picture. Cirium makes gathering everything you need to know regarding air traffic trends very easy. From gathering current competitive schedule information, to traffic and revenue forecasting, Cirium customers using Diio Mi with Fare Market Traffic and QSI Forecasting are accelerating airline development efforts.

    Expert tip: Jon Jager, Solutions Engineer, Cirium

    During my nearly ten years responsible for the Air Service Development at Dallas-Fort Worth International Airport, I must have built hundreds of business cases for airlines in the hope of recruiting a new flight to DFW.

    In 100% of my business cases, I included the same five or six slides covering traffic trends.  I was always going to show the airlines the following trends:

    • US to/from Destination Country traffic
    • DFW to/from Destination Country traffic
    • US to/from Destination Airport traffic
    • DFW to/from Destination Airport traffic
    • Premium/Leisure traffic mix on the O&D

    As a best practice, airport professionals should maintain current traffic trend figures as the foundation of all business cases. Once these trends are presented, it’s easy to include other cuts of data to cater to the target airline’s interests.

    An airport can spend years trying to win service to a new destination. There are a few key elements for where and how to include traffic insights into a business case.

    5 best practices for differentiating your pitch with traffic and fares data 

    Accelerate-5 best practices pitch deck-V1A

    1. Define the why
      Paint a picture of the landscape, the local economic drivers and what opportunities and needs are tied to that economy. Make sure to include business, leisure and family travel scenarios. Make it hard to ignore the potential revenue.
    2. Outline the how
      Explain what is happening in the market and demographics. Validate with detailed analysis there is enough demand to add service.
    3. Choose the target
      Assess which carriers best fit the market. Which airlines have the right business model and the right type of fleet? Select the target audience based on which organizations have the strength that will most benefit from the opportunity.
    4. Demonstrate network opportunities
      Review origin and destination to demonstrate future growth. Highlighting the additional traffic accessible via connections shows longer-term growth potential and proves your market is both sustainable and ripe for targeted market share strategies.
    5. Enrich the story
      Apply the wow factor. Create a business case to stand out from the rest. Incorporating additional points about passenger demographics and details can paint a picture to connect with the airline’s target market.

    Cirium customers using Full Market Traffic and Fares as an add-on to SRS Analyser or Diio Mi, are already quickly able to run analysis to enrich business cases.

    Sample business case development – adding DFW to India services

    In this scenario, Solution Engineer Jon Jager provides a real life example for applying traffic data to an airline pitch.

    Note from Jon: “I was building these business cases before the advent of the ultra-long haul aircraft (B787 and A350)…and at the time, we would pitch “tag-service” via an intermediate point in Europe. We did this because we could demonstrate origin and destination (O&D) traveler demand would support the proposed service. As of writing this article, Dallas-Ft Worth airport (DFW) still lacks nonstop service to India.”

    1. Define the why

    DFW-India Passengers Per Day, Each Way (PDEW)
    Source: Cirium Core, Traffic and Fares, September 2020

    DFW is home to a large technology sector that boasts tremendous links to India.  Sending people back and forth between worksites for these companies was one large component of this demonstrated traffic. Families of those relocated from India to DFW would surely come to visit.  And then, of course, there are your everyday, rank-and-file travelers, who choose to either experience “cowboy life” in DFW or visit places like the Taj Mahal in India. Using quality data from the Cirium Core can help surface data to prove (or disprove) these assumptions in just a few seconds.

    “In one simple pull of Cirium Traffic and Fare data, I am able to show tremendous O&D passenger growth between DFW and India over the last ten years. We see the traffic has more than doubled over this period, and there has also been close to 9% growth per year!,” said Jager.

    2. Outline the how

    How would a target carrier for this market garner enough traffic to make it worthwhile? Some carriers in this scenario might want to know what other destinations in India are important for the DFW traveler?

    DFW Passengers Per Day, Each Way (PDEW)
    Source: Cirium Core, Traffic and Fares data, September 2020

    Above shows the top DFW-India O&Ds for the YE March 2020: Hyderabad, Mumbai, Delhi, Bangalore, Chennai, and Kochi.

    3. Choose the target

    As of the YE March 2020, there were 390 passengers between DFW and India, per day, in each direction.  This is definitely a good place to start a business case. While the DFW-Mumbai market is only a percentage of the 390 DFW-India passengers, this particular pitch would be for a carrier like Air India that has a hub at Mumbai—and can funnel passengers through their hub to Indian destinations further afield from that city.

    One quick and easy pull shows the target carrier can easily serve the DFW-Beyond Mumbai passenger to numerous destinations within India (and that is before we look at possible connections to other cities across South Asia).

    4. Demonstrate network opportunities

    Why not pitch DFW-Hyderabad (HYD) as a target service? It is not a hub for the target carrier. In most cases airlines are much more willing to consider service into and out of a hub as opposed to point-to-point services.

    Using the Schedule module available in Cirium Diio Mi or Cirium SRS Analyser, it is easy to illustrate the power of the target carrier’s hub.

    From DFW
    Source: Cirium Core, Traffic and Fares data, September 2020

    5. Enrich the story

    At this point, the business case can definitely validate there is a strong market in terms of the number of passengers that could populate this flight…but what is the makeup of these passengers? Are they mostly low-fared leisure passengers, or are they high-fared business-types? When analyzing Full Market fares data, one-in-four travelers between DFW and India pay a premium fare, while the ratio leans even a little further in favor of premium passengers when we are looking at the proposed O&D of the new DFW-Mumbai (BOM) service.

    premium-traffic
    Source: Cirium Core, Traffic and fares data, September 2020

    Granted, this is a very narrow view of the data, so it would be incumbent to present this data as favorably as possible. In this case, the data shows a 27% premium component compares very favorably to other unserved DFW-South Asia markets.  It would just take a few Cirium data pulls to get the comparisons for perhaps DFW-Pakistan, Bangladesh, Sri Lanka, Nepal, etc..

    So what happens now? The airline is impressed with your presentation so far. Is there something which will add a little something extra?  Of course there is. While airlines should always run an internal route forecast inclusive or airline cost, Cirium makes it easy for you to create your own traffic and revenue forecast by using the QSI Forecaster available as an add-on to our SRS Analyser and Diio Mi tools. A user would need to ensure they also add access to Traffic and Fare Estimates to have a source of traffic data, but with a little thought and calibrating ahead of time, a traffic and revenue forecast can be run in just a few short minutes.

    Expert tip:

    I have worked with numerous forecasting tools over my 20-plus years in the industry and many of these tools can take a long time for a run to complete.  Some can take an hour, some many hours…and sometimes, the computer being used for the forecast run cannot be used for anything else while the forecast is being processed. You won’t have this issue with Cirium’s QSI Forecasting tool. When I say a few short minutes, I mean usually one or two minutes—tops.

    ~Jon Jager, Solutions Engineer, Cirium

    Diio Mi

    Quality data matters

    “Over the years, I have definitely seen some creativity in route case presentations—and the airlines generally appreciate that these business cases are more ‘art than science’.  But, at the end of the day, the data presented is the key to success. The target airline doesn’t care about the colors or cute font you use to present the case—they are all about the data. Cirium makes it easy for you to present accurate data in route case presentations,” stated Jager.

    For a more in depth summary of the changes in data quality related to COVID-19, watch a recording of a recent workshop or read Why data quality matters Thought cloud article.

     


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